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and we had a great time here at the reagan library. but the truth is, the reagan library was one of the examples, you end up with left-wing moderators who think they're centrist because everybody they know is to their left. [laughter] they think that they represent the center of america, because everybody they go to cocktail parties with is literally that far to the left. so they ask questions, if you were to go back and analyze the questions, and we're putting together right now an absolutely fascinating case study where george stephanopoulos asked this question about the 1963 griswold v. connecticut supreme court suit involving contraception. i guarantee you, because i was there, b every republican candidate in the debate is going, what? [laughter] now, we learned a few weeks later that george, apparently, had been briefed that this was the beginning of the war on women in which we discovered
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that $50,000-a-year law students who were unable to afford their own contraception have to have as part of the new socialist model free contraception, which then, of course, became a symbol -- we saw one article yesterday that "time" magazine may name her as the person of the year. well, of course, because after all, she symbolized more than anyone else the total dishonesty with which they won the election. she's the perfect symbol of our incompetence. but they clearly had a strategy. and george stephanopoulos launched the strategy. now, why would you want to set up a debate and invite the ore team in -- the other team in, it would be like us saying let's make a deal. the democrats will allow sean hannity, rush limbaugh and three comparable people to host all their debates. [applause] and yet we continue to pretended that the news media is neutral. the news media is the left.
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and so i think that you have to really start at a very fundamental level of rebuilding. by the way, this is a big problem in california where you need to have a serious effort to create a conservative, internet-based political immediate medium. because there is no effective political news coverage in california, and it makes it very hard to govern the state. [applause] >> time for the last question up here in the balcony, mr. speaker. >> hi. >> hi, balcony. >> i want to start off last christmas was my best christmas ever, you were 30 points ahead in the poll. [laughter] i told my families no gifts, no anything, my favorite politician is ahead. so thank you for a great christmas to start off. and then heading a little more controversial here, i did vote for romney, so let's start off with that before people start getting angry. to follow up with that, do you feel like the gop establishment forced romney on us, and if you
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did while you're campaigning, how do you feel about that, and how difficult was that knowing that's what they were doing? if you felt that a way? >> first of all, i don't think there is a republican establishment. i think governor wilson, who's lived through all this and gallagher will agree with me, the mythical notion that somewhere in the country there's a club where the republican establishment gathers isn't true. mitt romney spent six years running for president. he was very good at what he was very good at, which was raising money. which is how he had earned a living. i mean, he was a finance guy. he'd spent his entire career at bain being a finance guy. he knew lots of finance guys. they liked him, they were comfortable with him. they talked finance stuff. it all sounded good to them. they said, hey, this is our kind of guy. frankly, he's a smart guy. mitt romney's not a -- i'm not going to get sucked into some, he lost an election which i would argue any of us would have had a hard time winning because we were in an overmatch.
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we're like a mid sized college team being dropped into the super bowl, and we don't understand this yet. the obama people never quit. they kept offices open in '09, in '10, in '11. i think there were 53 offices in north carolina alone. and this is why i'm doing this six month study at gingrich productions which i've entitled lessons to learn. we don't have lessons learned right now. we don't know what we're talking about. when you see these guys on tv who wasted millions of dollars as consultants explaining what they now think, what you know is they don't. [laughter] because they haven't taken enough time to learn anything. i mean, this is a serious crisis of the conservative movement and the republican party because if we don't figure out the new game, we're not going to be, we're not going to be competitive for a generation or or more. that's how serious it is. i mean, don't assume we're going to win in '16 because we'll nominate some clever person who has the appropriate ethnic background and articulates
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better than mitt did. mitt got about what mccain got, which was about what dole got, which was about what bush i got running for re-election. that's a fact. and unless we get our act together, and look at the california republican party. you think finding the right individual is going to turn around the largest state in the country? it's going to take a serious, deep, fundamental rethinking. now, unfortunately, i've been around so long i was there for the rebounded after goldwater which took a total of four years. i was there for the rebound after watergate which took six years. i was there after george bush lost in '92 which took two years, and i was there after we lost thous in '06 which took four years. so if you said to me am i strategically optimistic? sure. they've got to govern. the world's not going to be kind to obama. they'll have plenty of mistakes. the challenge is not what they
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will do wrong, the challenge is whether we're prepared to slow down, think, have honest arguments and figure out what we need to do right. if we do that, this country will be just fine. thank you very, very much. [applause] that all right? that okay? >> for more information about newt gingrich, visit >> providence was founded in june 1636 by prominent baptist preacher roger williams who was forced to flee massachusetts because of religious persecution. it was one of the original 13 colonies of the united states and has a rich literary culture steeped in history. with the help of our local cable partner, cox communications, booktv brings you interviews and tours of the area all weekend long from our recent
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visit. >> my name is morgan grefe, and i'm executive director of the rhode island historical society, and we're in the stacks of the rhode island historical society library on the east side of prove department. we have an assortment of -- providence. we have an assortment of books. the first few are actually related to roger williams, probably the most famous founder of rhode island. there were more than one for the colony of rhode island, is so roger williams gets the most attention, and these books are some of the reasons why. the first book we're going to look at today is called "the key into the language of america." and it was published in 1643. it's an origin binding, so it is kept in this case. this book is 1643, and it is the first-ever dictionary of an indian language in english.
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this is an original printing, printed by gregory dexter. so these are london imprints. these were not printed in the colony of rhode island. but this became an amazingly important book not just in the 17th century where it does show, in fact, roger williams' claim on the land that becomes rhode island. it shows his relationship and the closeness with which he has worked with the native peoples of rhode island such as the narragansett, but it also is used through the 17th, 18th, and into the 20th century as one of the only dictionaries and keys to the language of algonquin-speaking people. so it really is an amazing work that retained its significance well into the 20th century. this book was incredibly well known and well used, and it wasn't a book of much controversy. unlike his next book which we're going to be looking at, which was just one year later, published in 1644, without his name or the name of the printer,
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gregory dexter, on this book. and this book is in a new binding so we can handle it a bit more gingerly. and it is the famous "bloody tenet of persecution." this is really where we see roger williams talking about the liberty of conscious and the freedom of religion. he is very much showing at this point why he is different and why his thinking is different and why rhode island will be different from massachusetts, the plymouth bay baycol and the other colonies to the north. he was creating a land where people could come, could worship as they chose and would always be protected by the civil law. roger williams, while he was a member of the clergy, was also incredibly trained and learned in civil law and actually worked for sir cooke in the british parliament and in the star chamber. and we see a lot of his ideas of
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civil law and separation of church and state begin to be articulated in texts like this. and this did not, of course, sit well with england or with massachusetts. by an act of british parliament, all of the copies of this book were set to be burned. luckily, not all of them were. this copy was not, and we're able to show that to people today who use this. this didn't go unnoticed by people here in the colonies. in the next book, a contemporary binding, is actually a response to "the bloody ten innocent." this response, the bloody ten innocent washed and made blood of the land. it comes just a couple years later, and a few years after that roger williams replies to him, and then cotton replies again. so over the span of about ten years you see the back and forth battle of words, and these men discuss the deepest, the philosophical ideas that then become really, in many ways, roger williams' founding of the first amendment of the united
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states. it is here where we see that separation of church and state articulated and argued over the course of a decade. arguably, one of the most important things that roger williams does bring to this colony that differentiates it from the others that are formed, even from quaker or, pennsylvania, later on, is this idea of true liberty of conscious. historians have argued through the 20th century ha this has not just an effect on the first amendment, on the declaration, on the constitution, but even an effect on the economy of rhode island and how it developed. because it welcomed immigrants and migrants from all over the colonies and all over the world saying to them we don't care where you're from, we don't care what you worship, you will be welcomed here to do work and be protected by the law. and this meant that people came here who were open to speculating in ideas and speculating in businesses. in fact, one man -- john hammet -- leaves the baptist faith and becomes a quaker. 1727 he publishes this small
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volume as a response. vindication and relation. and it's hammet giving his own account of this conversion process. liberty and conscious shouldn't be confused with the fact that roger williams liked what everyone was thinking, he certainly did not. and he had a heated debate with cakiers in particular. -- quakers in particular. this is 1727, roger williams has passed, but it meant he could detest what the quakers believed, but he felt he had no right to keep them from practicing that faith. and hammett was a man who was an example of how you could even migrate from one faith to the next, and no one understood that more than roger williams. but one of the more important things to us, at least, in the history of books and imprints here in rhode island is that this is published in 1727, the first year that printing is being done in rhode island. and it's printed here and sold by james franklin.
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of newport. james franklin is the older brother of ben franklin, and it was to his brother james that ben franklin was apprenticed and learned the trade. so this is one of three books that survived from the 1727 printing, and the only copy, i believe, that exists of john hammet t's relation. as we move forward, we go into some of the more cultural aspects, and something that i find utterly delightful, one of the other sights that we have at the rhode island historical society is the john brown house museum. and we know that john brown's daughter was married in 1788, and we have diary accounts of the country dances that she did. what we have here in our printed collection that shows the deep connections between the artifacts and the museums and the printed collections is the first printing, the only surviving copy we know of, earliest collections of country dances and cotillions. this is produced by john
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griffith. and it is a wonderful account of the dances that were or being done, the newest and most fashionable. "the pleasure of love," "the pleasure of providence," "the morning gazette," all of these wonderful dances that we know and can imagine the men and women of providence in 1788 doing. and it's one of the strengths, i think, of historical society collections and libraries in general, is that they aren't just repositories of the works of luminaries and great thinkers such as a roger williams, but they really are places where people can find the cultural history and find out more about the dalety life of -- daily life of everyday people and how they would have been expressing themselves whether in word, dance, music, film in the 20th century. and the collections here have all of that, and i think this is a wonderful example of an early piece of our cultural history. the next piece we have hearkens
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back a bit even though it's a later period, it's 1806. many people might now that rhode island, actually, has the first sin gold in north america -- synagogue in north america. so we have a very active jewish community in rhode island from the 18th century on. and it becomes significant, individuals throughout the state's economy and its political life. what we have here, again in original binding, is the first printed jewish calendar in north america. it shows, it's a lunar calendar, and it reflects on all of the festival days, all the days of significance for a period of decades. and one of the really beautiful things about it is that there's also notes in hebrew throughout this binding. what we have before us now is a
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photo album, a scrapbook from a rhode islander who americans know probably better tan they even know roger williams, and it's a man named elijah hunt rhodes. he never did anything as famous as nathaniel green. he kept an amazing diary in record, and he was discovered by ken burns, and he became the model for billy yank in the ken burns' civil war series. so we are fortunate enough here to have been given the elijah hunt rhodes collection from his family, and this is one of the wonderful scrapbooks that we have from elijah hunt rhodes. after he left the war, he went forward as a civil servant, he became active in the grand army of the republic, he was an active free mason, and he stayed engaged with the troops and with the war. but he has these wonderful
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scrapbooks, and this is really a portrait book, if you will, of other -- the major general, frank wheaton. lieutenant general phillip sheridan. and really just an absolutely lovely collection. here he is as brigadier general elijah hunt rhodes, and that's sort of how i think of him the most in the way we envisions him. he goes out as this young man and has a calamitous series of getting shot, but the bullet gets stuck in his bible and all of these wonderful stories that make him very real to us. he becomes engaged, and his romance with his my fiance is complimented from books like this as well as the artifacts that we have such as the wrist warmers that she knit for him and sent off to him while he was at war. and in the midst of this wonderful collection of photos we have his horse. and this amazing place of honor with all of these major
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generals, we have kate. and he would never have had a place of honor for the soldiers of the civil war without recognizing the incredible role that his horseplayed in that. -- horse played in that. and the last thing we're going to look at in this collection, there's some wonderful examples of jewelry design. rhode island is an industrial capital in the 19th century and into the 20th century, right up until about the middle of the century. it's probably best known for its textile industry. but, in fact, by the turn of the 20th century rhode island really is the jewelry capital of america. and nowhere better to learn that or teach that than at the rhode island school of design. they began by setting industrial design, but they quickly turned into having a wonderful jewelry design department. and what we have here is a book written by one of the teachers of the rhode island school of design, augustus f. rose. we can see this is his textbook, jewelry making and design, that he comes out with while he is
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running the department there. he had been working for years and making tools related to the jewelry trade, so for some periods in his life he's making anvils, and he's making the heavier tools. but we can see the real artis ri that's going on -- around tryst ri in the design and jewelry manufacturing area as we see beautiful pieces from 1905, from the early part of the 20th century that show the art nouveau influence, show the maritime influence in rhode island and really illustrate very well the fine craftsmanship and fine detail of manufacturing that we could see in providence at the turn of the 20th century. rose again is a prominent figure. manufacturers and designers are some of the most prominent individuals in rhode island at the time. he, again, is an active freemason and begins a family in rhode island and stays here and really helps to shape the
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beautiful jewelry-making scene that became so important throughout the 20th century in rhode island. each one of these pieces tells an amazing story about, again, our national history. we have the beginning and founding stories that help us understand the ideologies with which our nation was shaped, that a set us apart from other countries. and as we struggle, i think, to understand our place as we move forward, it's helpful to us to reflect back on what the real grounding principles actually were rather than exaggerated or misunderstood versions of the founders' intent. and i think roger williams represents a departure from that normal story and shows how even a small colony can have, had a great impact on the way the rest of the nation and the world thought. works by men like john berry, his recent book on the american soul and roger williams, being able to come to a repository like this to see the collection,
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see the writings of roger williams he was able to learn what other historians are learning about roger williams. he wrote important works, and there's very little evidence that thomas jefferson was reading roger williams. but he was then able to go to a library and archives in england, and they, too, haddock units, and they had library are records, and he was able to see there that john locke was reading roger williams. and we start to see how these ideas were transatlantic, were moving all over the world well before we think of the global exchange that we have today. these other books show us how people were living, how they were interacting with each other. they also show us how we shaped our economy as we, again, struggle with how we redefine ourselves to new economies and political structures throughout
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the world. we can come to places like this, and we can understand how adjustments were made, how a community could redefine itself and take advantage of opportunities that might not have existed before. and what i love so much about libraries and about history and about research is five people can look at the same book and walk away with five completely different stories and interpretations. seeing what's important to them and making it into something that is relevant for an unimaginable number of communities. so we might say that history is a set of facts, but really history is an interpretation. and libraries are the places where people can come and immerse themselves in that. and i believe deeply in the importance of digital repositories as well. it allows greater access. it allows people to zoom into things that they would never be able to see so closely before. but i believe there is truly something amazing and magical about a personal communion with an artifact or book, an imprint from the past as we hold a book
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that maybe roger williams held, as we hold in our hands the life's work, the photo album that elijah hunt rhodes put together as he remembers the civil war. i think it transports us, and it's the closest thing to a time machine that i've ever found. so i find it an absolutely delightful opportunity to be able to be immersed in the world of history. and that's what you can do at a library. >> as one of the first cities established in the united states, providence, rhode island, has a nearly 400-year history, integral to the development of the uncan. as the site of the first bloodshed of the american revolution to economical devastation during the great depression and eventual recovery after the investment of public funds, providence is rich in historical and hit area sources and materials -- literary sources and materials. >> i'm michael chandley, i'm
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proprietor of cellar stories bookstore here in providence, rhode island. we are in southeastern new england. we're the largest used and rare bookstore that you will find. this is the greatest job in the world. it's just the never knowing what you're going to see, what kind of books will come into the store, what people will come into the store. we've had famous authors come into the store shopping, we've had people that are performing in rhode island or massachusetts come into the store. it's exciting to not know what's going to happen every day. and to be surrounded by all these great books. it's just a wonderful environment. a friend and i kind of had a romantic idea about starting a used bookstore. we both had english degrees and used to go around to different bookstores and thought it would be neat to open one. and we did and quickly found that we didn't know anything
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about business or the book business. and he dropped out and pursued other quests, and i kind of stuck with it. at that time there was a magazine called the antisquare yang bookman's weekly. and people -- the first 25, 30 pages were articles about the book trade, and the rest of the magazine were lists of books for sale, and in the back of the magazine books that people wanted. so that was president bush how i learn -- pretty much how i learned about the book business, going through the magazine and reading the articles. we started in '81 in the basement of of a building up the street and, hence, that was the name, cellar stories, because we began in the basement. while we have a little bit of
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everything, we also have in-depth collections of rhode island history. we have a lot of math books. we have art and architecture, modern first editions and poetry. those are probably the things that we're strongest in. the sale of books does follow popular culture pretty much. however, this literature section has always been the best-selling section in the store, and that's kind of heartening that people are always reading that kind of thing. providence always has been a wonderful place for used books just because it's one of the oldest colonies. so there are vast collections of books in providence, and we've been able to tap into that over the years and buy collections from some of the oldest families in rhode island. and we just have a wide breadth
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of books that most stores don't have just because of our geographic allocation. we get collectors coming in from all over the country. pro dense was the renaissance -- providence was the renaissance city, so tourism in providence has really picked up over the last 10 or 15 years, and we do get an awful lot of tourists coming in, people who use their vacations to go looking for books in different cities. and that's been a real boost to the store. we've, we have a two-volume first edition of madam bove ri -- bovary, published in french. that's relatively scarce. there aren't too many of those surviving. and once i got a call from a person in providence who was, who got a donation. he was running some kind of
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outreach program, and it was a donation of books. and about eight or ten of them had been signed by earnest hemingway, and that was a really good find. there were other great books in there signed by barn by conrad who was an author that wrote about bullfights, so it was related to hemingway who was also a officionado of bullfights. and there was a book signed by john steinbeck. it was just a great catch. when we get something like that, either collectors or other dealers are quick to come in and make purchases. we started out as a pretty small store and slowly grew over the years and have been able to adapt to the changes in the book trade which have been pretty substantial with the introduction of the internet and
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changes in people's book-buying habits. the people coming into the store was the dominant driving force for sales. we did some mail order, but it was pretty small. once the internet started, especially amazon, that kind of changed people's buying habits. so we saw a reduction of people coming into the store, walk-in traffic and an increase in mail order traffic and people o -- order oing over the phone and especially ordering over the internet. it's especially affected us in a couple of ways. one is that it's kind of driven down prices for average books, for run-of-the-mill books. things, even some of the books
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that were priced slightly higher people thought they were fairly scarce because you could go into five or ten stores and not find a copy of the book. but then when you look on the internet, they're really readily available. so the price has gone down for a lot of things. on the other hand, we've been able -- it used to be that if we bought a back book about a cityn oklahoma, we would really have to wait until someone from oklahoma came in and was interested in that book. but now with the internet we can list that book, and someone in oklahoma finds the listing, and we sell the book pretty readily. with publishers producing fewer books every year now, if they don't patronize stores like this or independent stores, they're going to find that there aren't going to be books around. there's already a decrease in the number of books that are available because of ebooks, because of textbooks being put
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online instead of being produced. so there will definitely be a decrease in the number of books available, and if stores like this don't survive, then there won't be books readily available for the public. as the book business continues to change, i'd like to just be able to persevere and stay here for the indefinite future. >> for more information on booktv's recent visit to providence, rhode island, and the many other cities visited by our local content vehicles, go to >> and now a panel from miami book fair international on president obama. this is about an hour 5 minutes. 15 minutes. [applause] >> good afternoon. what day for a great discussion. we have a great panel today, and welcome to this 29th year of the
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book fair miami, miami book fair international. i'm the new kid on the block, so if you're raising your hand and have never been here, i join you in that. what an event, to see so many people here year after year, a very popular event, and today's no exception. we have a great panel joining us today. i'd like to introduce them. we have just a short amount of time today with three great authors, so we'll get started. david maraniss is talking about his book, "barack obama: the story." he'll be following up michael grunwald, he's joining us, he's going to be speaking on the new new deal, the hidden story of change in the obama era. but to lead off our discussion today is neil barofsky on "the bailout." so let's give a big round of applause. cbs-4 has been here for ten years, and we appreciate being a sponsor of this event and great to have these guys joining us today. [applause] take it away, thank you so much.
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>> thank you so much, and thank you, everyone, for coming out, and thank you to my co-panelists. this is really just an unbelievable thrill. it's hard to put into words. so here we are after, days after the most recent presidential election. and it's hard to believe that it was really four years ago as we were -- at least i was celebrating the first election of then-senator barack obama as president of the united states of america. and, you know, as a country it was a remarkable time. it was a much different election. we were in the midst of a financial crisis, a crisis -- forgot my clock. otherwise i'll go on for, like, 45 minutes. a financial crisis that really started here in the united states but brought almost the entire global economy to its knees. and in the course of that election and with president obama taking office, we really as a country were at a crossroads of where we would go next with a system that was
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clearly a broken status quo. would we go back as a country to the stable financial regulation, boring banking that was enacted after the last major financial crisis, the great depression? boring, but effective. decade upon decade of financial stability, um, that had ushered in a remarkable era of growth for this country. but, you unfortunately, which hd been broken down piece by piece in the decade leading up to the financial crisis. or would we double down on that system? would we take those banks that were so large and so interconnected and so politically powerful that our leadership's decided any one of which if it were to fail would bring down the entire economy and had to be rescued? would it allow them to become 20-25% larger than before the crisis? would we pass watered-down regulatory reform that all but cemented their status as too big to fail? would we preserve all the broken incentives and perversions of a
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global capitalist market that accompanied them and put us on the path to what i believe is an even more significant and more dangerous financial crisis than the one we just experienced? unfortunately, i do believe we chose that latter path. but four years ago, of course, we didn't know that. and i remember going into that election watching what was happening all around me with a sense of detached horror. horror, because i understood what was going on in the financial crisis because of my perch as a federal prosecutor and assistant united states attorney in the southern district of new york. i spent years doing securities fraud cases, prosecuting big wall street firms and then earlier in 2008 i formed and was founder of a mortgage fraud group that was tackling some of the mortgage fraud that contributed to the crisis. and from that vantage point, i did have a sense of what was going on. i had seen that you should this guise of -- under this guise of financial innovation which we were told by wall street and the regulators in washington and new york was this seemingly magical thing that insured huge profits
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and fees for the wall street banks that took normal mortgages and turned them into complex financial instruments. not only would it give them fees, it would expand home ownership. and as we were told by our regulators, actually reduce risk in the system, make everything much safer, of course, until it didn't. and i saw this innovation, what it did was create this mania, in the need, this thirst for mortgages, more and more mortgages. the more people lived, they became financial instruments to feed this machine. and when they ran out of normal mortgages, they had to expand the pie to these financial products that people didn't understand and basic underwriting standards. what a bank is supposed to do to make sure that a borrower can actually repay their loan all got thrown out the window. it no longer mattered as long as they had mortgages to feed into the machine. fraud, i saw, became something that was to be rooted out and destroyed from a banking system to something that was an
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inconvenience; at first ignored, later all but encouraged and to be concealed by the unwitting homeowner. and i saw how this was tremendously profitable, except for the unwitting homeowner who's signing a mortgage that they didn't understand b and never had a chance to be able to pay off on the the one end and the investor who's relying on the promises of wall street bank and their enablers, the credit rating agencies, thinking they were buying something as safe as the united states government debt before it all exploded. so i had a sense of horror, but as i said, my horror was a little bit detached because it didn't impact me. i was a renter, not a homeowner, and i had a job with the united states government. i had the safest job imaginable. i was a career public servant, civil servant, and as a fraud prosecutor, financial crises are usually good for business. [laughter] so for me, it was detached. but that all changed for me in october of 2008 when i got a call from my boss, the u.s.
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attorney, mike garcia. he called me into his office, and i still have that, oh, my god, getting called to the principal's office feeling in the pit of my stomach. he handed me a printout, a piece of the historic legislation that congress had passed authorizing treasury to go out and borrow $700 billion to rescue wall street, to bail out the banks and put us on the path supposedly to economic recovery. um, and this piece that i was not aware of was that when they passed this law, congress created this brand new agency. and when mike got off the phone, he explained what this agency was going to do. it was going to have two different functions. one was a mini-fbi for the t.a.r.p. that was going to be guns and badges and special agents executing search warrants, taking criminals out of their homes, putting them in handcuffs and putting them in jail. congress had realized that when pushing out so much money, it was inevitably going to draw criminal fly toss all that --
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flies to all that government money. the second part was an oversight function. it was supposed to bring transparency by giving reports to congress and to the american people in what was going on in the bailout and to help guide treasury who was in charge of implementing this program to make sure the policy goals would be implemented. and as mike is telling me about this, i really had no idea why he was telling me until he said that he was going to recommend me to the white house for this job. now, i wasn't really interested in going to washington. i had some experience as a prosecutor with that swamp on the potomac, and i really had no interest in going back. and i started ticking through my reasons to mike; i was getting married in january, i just started the mortgage fraud group, i had a trial i'd been working years on to try coming up, and mike knocked my objections down one by one. finally, i rolled out what i thought would be the big gun, and i said, you know, mike -- because he described this as a job that would require the
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nomination of president george w. bush. i said, you know, mike, i'm a registered democrat. [laughter] he winced, he's a bush appointee, and i sort of let it hang in the air. and i said last week i contributedded to senator obama's campaign. [laughter] now, i thought i was off the hook for sure, but i wasn't. and mike told me, no, no, this is a merit appointment, it has nothing to do with politics. and as i sort of rolled my eyes thinking about the fairies and unicorns that were going to give me a high-profile nomination from president bush, he told me it was my duty and obligation to take this job. he talked about how our office, which was steps away from the world trade center and reminded me of the young prosecutor how we responded to the september 11th attacks. and he explained this was the economic equivalent of 9/11 and taxpayers had spent a lot of money training me in the previous eight-plus years for this job, and that it was my job to step up and try to protect that money. and i told mike it was a good
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speech. i told mike i'd think about it and went home and talked to my wife and she told me the same thing, which is i have to do it. in a whirlwind of six weeks, i had been nominated, i interviewed at the white house and the treasury, two buildings i never imagined i would ever step foot in in my life and was confirmed as the special inspector jean for t.a.r.p -- inspector general for t.a.r.p.. and as i took that oath of of office on december 15, 2008 in secretary hank paulson's office, a lot was going through my mind, as you can imagine. i thought i was going to be doing a law enforcement job. i knew we had the oversight function, but i thought this was going to be -- this was my experience, this was my background, cops and robbers, and that's what i thought the job was going to be. and that's where i thought my focus would be. i kind of believed, somewhat naively, that treasury sort of had it covered on the banks, and i would help them protect it from fraud. i soon realized that was wrong, that i was going to have to change my focus significantly as
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i realized as i started interacting with treasury officials just how captured they seemed to be by the magic of wall street, how deferential they were to the largest banks' interest over that of main street. the other people were supposed to be helped by this bailout. what i suggested the first couple of days, that, hey, let's do something crazy like actually have the banks make them tell us what they're doing with our hundreds of billions of our money. i wasn't just told no, i was told that i was stupid, that i was playing politics, that i didn't understand basic things. um, i was -- when i said that, okay, i'm going to go do this myself, i was told that if i did so, i would destroy the t.a.r.p. program and with it destroy the entire banking system in this country. [laughter] i was cursed at by the new treasury secretary, timothy geithner, when i suggested that he should do the same and for daring to suggest that he was anything other than the most transparent secretary of treasury in this country's history. [laughter] thanks.
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it's funny when i get cheered for getting cursed at. [laughter] but it wasn't just that. as i was doing my job and seeing that all this money had gone out without any, with no strings attached w no incentives to accomplish the policy goals and i started seeing vulnerabilities to fraud, conflicts of interest where banks could make money on the taxpayers' back, i wasn't necessarily told i was wrong, i was just told that my concern was misplaced. we didn't need to worry about it, neil, today said with a figurative pat on the head. these were bank as. they would never risk their reputations by putting profit over that of the public policy purposes of this program. [laughter] and i really want to stress this. this was not just said to me by the bush/paulson people, this exact same mantra came after the election by the obama/geithner treasury officials, the exact same words, this clinging to this greenspanian notion that reputational risk is all we need, we don't need fraud
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protection. and i remember thinking to myself where have these guys been for the past couple years? how could they not know that these banks will put profit over everything, in particular their reputations? and then i realized where they had been: merrill lynch. bear steps. -- bear stearns. bank of america. goldman sachs. goldman sachs. everywhere i looked, it was someone from goldman sachs. and i realized they had brought that wall street ideology to government and that one of the reasons why we saw this incredibly deferential bailout on such generous terms to the very institutions that had brought down our economy. and i realized that my focus was going to have to be on more than just law enforcement, but that i was going to have to be an advocate for the taxpayer to try to protect this program not just from the banks, but from the treasury officials who seemed to be indifferent to the advantages they were giving to those banks over everyone else. and i think, you know, over the course of years we had a mixed bag of success.
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i think we did a good job in limiting the losses to fraud. as a law enforcement agency, we locked up or have criminal charges against more than a hundred individuals for trying to criminally profit off t.a.r.p.. we put one ceo behind bars for more than 30 years, and i think our recommendations notwithstanding that initial pushback really did help protect and limit the exposure to fraud. where we failed, though, is where the t.a.r.p. failed and why i believe that t.a.r.p. is a failed program. it was getting treasury to prioritize those main street goals, the reason why t.a.r.p. was enacted to help not just the banks, but main street. the best example of that is the housing program, i think. now, quick history lesson. if you may remember when the t.a.r.p. bill got passed, it didn't get through the first time. and for a republican administration, they needed the democrats. and in particular they needed a group of progressive democrats in the house in order to get the votes to pass the t.a.r.p. bill. but not surprisingly they
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weren't terribly interested in voting for a bailout of the institutions that had caused the crisis in their view and was having such a devastating impact in their communities and in their districts. what they cared about was the foreclosure crisis which was destroying their communities. so they brokered a deal with treasury that said, basically, okay, we'll vote for your bank bailout, but you're going to have to prioritize helping homeowners. and they put language in the bill saying preserving home ownership and provisions in the bill that would require treasury to do something about the foreclosure crisis. um, and so t.a.r.p. was passed. but that promise was always left unfulfilled. the paulson/bush people did nothing, the obama administration announced a program that sounded wonderful, $35 -- $75 billion to help people stay in their homings, but about 20-22% of that number has been melt, the program has ground to a halt in part because it was filled with conflicts of
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interest, horribly designed. and they actually because of some of the incentive structure, a very flawed incentive structure because treasury relied on the banks themself to carry out the program, it often was more profitable for a bank to string out a homeowner, squeeze out their last remaining life savings and throw them on the foreclosure scrap heap than to actually modify the mortgages so they could stay in their homes. and it's one of the reasons why this program has spent a little bit more than what we gave to american express through the t.a.r.p. program, this program that was supposed to help four million homeowners and was one of the only reasons why the bill was passed. so this was remarkably us frustrating, as you can imagine. and, you know, part of our job was the to make these programs effective. and it really all become clear when we had an oversight meeting with secretary geithner in late 2009, and i was there, and now-senator-elect elizabeth warren -- and i love saying that over and over again, senator-elect -- clap for that. [applause]
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at the time she was the head of a congressional oversight panel, another oversight body, and she was grilling geithner on this home ownership program and how it's ever going to possibly meet these goals. and she got under his skin the way only she could really get under his skin, and he snapped at her eventually and said, look, we -- by our estimate the banks can handle about ten million foreclosures over a period of time, and sort of said this without any empathy about what it meant for the families. but anything more than that could render them insolvent which meant they'd have to come back for another round of bailouts, and geithner explained this would help, in the his words, form the runway for the banks. in other words, this program was about extending out the foreclosure crisis for the benefit of the banks, not for the four million homeowners, and that's one of the reasons why we haven't seen the success and why we haven't seen the banks being punished for their incredible transgressions against homeowners. it was, like every other aspect of the bank bailout, not about
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main street, but act protecting and enabling the -- but about protecting and enabling the bankings. that is one of the reasons why i consider t.a.r.p. a failure. it failed to live up to its other goals of restoring lending, of helping to rick start the -- helping to kick start the economy, and i think the other part is, as i mentioned before in my opening comments, um, i think it's helped preserve a very broken status quo of a financial system that advantages the very elite financial institutions at the expense of the rest of the country. and i think we are on a path as a result to another, potentially more dangerous and more damaging and more devastating financial crisis. but i do have to offer a solution. i can't just sit down there and turn it over to my panelists. so let me just offer two areas where i think -- and i talk about this in the afterword of the book -- about what we need to do. first of all, i think we need to smash these giant financial
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institutions. [applause] write your senator. but we need to, we need to rip out this incredible political power that comes with these institutions and the economic power and what they've done. but we can't just stop there. we need to deal with the regulatory side as well. those captured treasury officials that i dealt with. and not just there, but trout the agencies that face off with wall street. and before i sit down, i'll just giver one anecdote that i open the book with that i think captures a lot of the problems that we have as a country in our regulatory system. in 2010, april 2010 i had a terrible relationship with my counterpart at treasury. he was an assistant secretary, presidential appointee named herb allison, and he had a storied wall street career. he was the president of merrill lynch and had retired. and the patriotic act had come out of retirement in order to serve under the obama administration and to run the t.a.r.p. program, but we didn't get along well, and our weekly
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meetings had devolved into shouting matches. one week i got yelled at for using a saturday night live character making fun of tim geithner. it was funny. he told me how outrageous this was and how the secretary himself was very upset when he heard about this, but i learned he has no sense of humor. [laughter] but it was bad. so we decided we'd meet off line and have a drink at one of those terrible washington restaurants to try to just clear the air. and we sort of had our chitchat, and i talked about how our daughter was about to be born, and then the conversation sort of turned. and he asked me what i wanted to do next, what my plans were after in this temporary job i had. i explained i wasn't really sure. i said, well, maybe a job on the street, meaning wall street, i said i wasn't really sure. and he said i was doing myself
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real harm. he explained to me that my tone of my criticisms of wall street as well as the obama administration was going to really harm my ability to get a job after i left this position. and, you know, i explained to herb that i wasn't terribly concerned about a job, i had a focus on this, and he pressed. he said what about something in the administration? maybe a federal judgeship, an appointment like that by the obama administration. and i said, look, you know, i would love that. what lawyer would not want to be a federal judge, but i said i don't really think that they're going to do that. i sort of had made a lot of nonfriends during my time at this point. and he said it doesn't have to be that way, neil. all you have to do is be a little bit more upbeat, be a little bit more positive in what you do, and then these things can happen. now, i was really angry. i was mad. i called my deputy up as soon as i walked out of that, and i explained to him word for word what had happened, and he said you just got the bullet or the
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bribe. i said, yeah, the gold or the lead. and this was a process that pablo escobar had use inside colombia to corrupt -- [laughter] he'd go up to a local official, a judge, a magistrate and say here's your two choices, you can have this giant bag of pesos, or you can get a bullet in your head if you want to do your job the way you're supposed to. so kevin said, you just received the white collar washington equivalent of the bullet or the bribe. and i believed that at the time, and i was angry, as i said. but over the course of years, i realized that was not what happened. herb was not threatening me or promising me anything, he was just telling me the way it was. that is the reality for regulators who face off on wall street. they could go long and get along, you know, have a good, upbeat tone and cash in, spin through that revolving door and get that huge pot of gold at the end of the wall street rainbow, or they could be aggressive and do their jobs and do themselves real harm. so, ultimately, i think any
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solution would have to deal with both of those things, um, and by the way, i know this sounds very negative and dour and depressing, but i do see areas for hope when i see elizabeth warren getting elected to the united states senate. [applause] i see some of the reforms of the consumer protection bureau, and i do think that there is a path for us to follow, but we all have to be committed to make sure we go down that path. so thank you so much, and i'll hand it over to the more upbeat talent. [applause] >> hey, thanks. that was, that was great. it's a real thrill to be here with neil. i wish, i wish i got applause for getting cursed at, i would have had a much more enjoyable career, i think, in journalism. and i have to say it's a particular thrill to be here with david. you know, i spent, i spent nine years at "the washington post" before i moved to the public
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policy paradise of south beach. [laughter] and i have

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CSPAN January 5, 2013 3:00pm-3:55pm EST

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